https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/222

 REPUBLIC OF KENYA IN THE TRIBUNAL OF KENYA AT NAIROBI COUNTY COURT NAME: TAX APPEALS TRIBUNAL CASE NUMBER: TATC/E662/2025 ROSSALU ENTERPRISE LIMITED VS KENYA REVENUE AUTHORITY JUDGMENT # BACKGROUND 1. The Appellant is a limited liability company incorporated within the Republic and a registered taxpayer. 2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469 of Kenya’s Laws. Under Section 5 (1) of the Act, the Kenya Revenue Authority is an agency of the Government for the collection and receipt of all tax revenue. Further, under Section 5(2) of the Act with respect to the performance of its functions under subSection (1), the Authority is mandated to administer and enforce all provisions of the written laws as set out in Part 1 and 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenues in accordance with those laws. 3. The Respondent assessed the Appellant for VAT on supplies made to its customers. The assessment was not filed. 4. Whereas the Appellant objected to the assessment, the Respondent’s position was that the objection did not meet the threshold as provided under Section 51 of the Tax Procedures Act Cap 469B(TPA). The notice of objection was not filed. 1. It appears from the memorandum of appeal that the Respondent issued a decision dated 22nd May, 2025. The decision was not filed. 2. Dissatisfied with the decision, the Appellant lodged notice of appeal dated 20th June 2025 and filed on the even date. # THE APPEAL 1. The Appellant lodged its memorandum of appeal dated 20th June 2025 and filed on 21st June 2025. The memorandum raised the following grounds of appeal: 1. That the Respondent erred in law and in fact by failing to consider the Taxpayer's documents and explanations before issuing the objection decision which confirmed an amount of Kshs 1,012,080.14. 2. That the Respondent erred in law and in fact by rejecting the Taxpayer's objections on the basis of lack of validation, and non- provision of relevant documents, despite the fact that the required explanation and supporting documents were duly submitted. 3. That the Respondent erred in law and in fact by including income arising from exempt sales which are not subject to VAT under the Value Added Tax Act Cap 476 (VATA). 4. That the Respondent erred in law and in fact by failing to appreciate that the Taxpayer had submitted valid documentation relating to sales made to the County Government of Busia, including some sales that were left out of the return by mistake but are now acknowledged and supported by evidence. 5. That the Respondent erred in law and in fact by disregarding the submitted documents and failing to acknowledge that the sales in question were exempt supplies, despite the Applicant having duly provided supporting documentary evidence to that effect, and the sales being properly accounted for and substantiated. * 1. That the Respondent erred in law and in fact by issuing an Objection Decision on 22nd May, 2025 2. That the Respondent erred in law and in fact by rejecting the objection despite the submission of valid supporting documents for sales to the County Government of Busia. 3. That the Respondent erred in law and in fact by failing to consider available supporting documentary evidence for exempt outputs, and the Applicant respectfully requests an opportunity to produce the same for verification. # THE APPELLANT’S CASE 1. The Appellant did not file a Statement of facts but filed written submission dated 16th February 2026 and filed on 17th February 2026. 2. The Appellant submitted that the Respondent erred in law and fact by failing to consider the Appellant's explanations and supporting documentation before issuing the objection decision. 3. The Appellant submitted that the Respondent unlawfully rejected the objection on grounds of lack of validation, and alleged non-provision of documents despite full compliance by the taxpayer. 4. The Appellant submitted that the Respondent improperly subjected exempt supplies to VAT contrary to the provisions of VATA. 5. It also further submitted that the Respondent failed to appreciate valid documentary evidence relating to sales made to the County Government of Busia, including sales omitted from earlier returns but later disclosed and supported. 6. The Appellant submitted that Section 51 of the TPA obligates the Commissioner to consider all evidence submitted and to issue a reasoned objection decision. It also submitted that whereas Section 56(1) of the TPA together with Section 30 of the Tax Appeals Tribunal Act Cap 469A (TATA)places the burden of proof upon the taxpayer to demonstrate that an assessment is excessive, once credible documentary evidence is produced, the evidential burden shifts to the Commissioner to rebut the same. 1. The Appellant asserted that the Respondent ignored material evidence, misapplied VAT law by taxing exempt supplies, and rejected a properly supported objection on untenable grounds. It therefore submitted that the Appeal is meritorious and ought to be allowed with costs. # Appellant’s Prayers 1. The Appellant prayed that the Appeal be allowed. # THE RESPONDENT’S CASE 1. In opposition to the Appeal the Respondent relied on its Statement of facts dated and filed on 3rd March 2025 and its written submissions dated and filed on 3rd March 2026. 2. The Respondent stated that The Appellant was assessed for VAT on supplies made to its customers and did not comply with the mandatory provisions of the VAT Act. It stated that the Appellant's purported objection did not meet the threshold as provided under Section 51 of the TPA. 3. The Respondent asserted that the Appellant did not provide any documents to support or prove that the Respondent's assessment was wrong in accordance with Section 56 of the TPA. 4. The Respondent averred that the Appellant's objection application contravenes Section 51(3) (c) of the TPA which mandates the taxpayer to file documents in support of the notice of objection. 5. The Respondent submitted that the Appellant failed to discharged its burden of proof on the basis that the Appellant did not file any evidence to support the objection. # It cited the case of Leah Nieri Njiru v Commissioner of Investigations and Enforcement Kenya Revenue Authority & Another [2021] eKLR to support the position that the Respondent’s decision enjoys presumption of correctness and that it is upon the taxpayer to prove that the decision is incorrect which the Appellant failed to do. 1. The Respondent also cited the cases of **Boleyn International Ltd vs Commissioner of Domestic Taxes TAT 55 of 2018;** and **Bemarc Limited v Commissioner Domestic Taxes, TAT 101 of 2016** to submit that the Taxpayer must prove that the Respondent’s decision was incorrect. # Respondent’s prayers 1. The Respondent prayed that: 2. The confirmation of assessment be upheld; 3. The taxes due and unpaid together with interest thereon be paid to the Respondent; and 4. This appeal be dismissed with costs. # ISSUES FOR DETERMINATION 1. The Tribunal has considered the pleadings and submissions made by the parties, and considers the issues for determination as follows: # Whether the appeal is valid; and 1. **Whether the Respondent was justified in confirming the assessment.** **ANALYSIS AND FINDINGS** 1. Having identified the issues for determination, the Tribunal proceeds to analyse the same as hereunder; # a. Whether the appeal is valid. 1. The Tribunal has taken note that the Appellant did not file the assessment, notice of objection, the objection decision nor did it file a Statement of facts. 1. Section 13(2) of the TATA provides as follows in relation to filing of appeals: *(2) The appellant shall, within fourteen days from the date of filing the notice of appeal, submit enough copies, as may be advised by the Tribunal, of—* 1. *a memorandum of appeal;* 2. ***statements of facts;*** *and* 3. ***the appealable decision****; and* 4. *such other documents as may be necessary to enable the Tribunal to make a decision on the appeal.* 5. In **Aura Outlets Limited v Kenya Revenue Authority & another [2021] KETAT 38 (KLR)**, this Tribunal observed as follows: *‘‘The objection decision constitutes the appealable decision before the Tribunal and it is entirely upon the Appellant in pursuant to Section 13(2) of the Tax Appeals Tribunal Act to submit to the Tribunal the tax decision at the instance of lodging an appeal.”* 1. This Tribunal while striking out the appeal in the case of **Genpely General Contractors Limited v Kenya Revenue Authority [2023] KETAT 880 (KLR)** stated as follows: *Tribunal also notes that the Appellant failed to comply with the mandatory requirements of Section of 13 (2) (b) of the TAT Act by failing to submit a copy of its Statement of Facts.* 1. The Tribunal is fully aware that the power to strike out pleadings has been described as a draconian action. The Court of Appeal in **Auctioneers & 2 others v Orina [2024] KECA 705 (KLR)** had the following to say on powers of the Court in relation to striking out of pleadings: *‘‘It is trite that striking out a pleading is a draconian act, which may* *only be resorted to in plain cases. The power of this Court to strike out an appeal is discretionary and is exercised based on the peculiar circumstance of each case.’’* 1. In addition, the Court of Appeal in **Kivanga Estates Limited v National Bank of Kenya Limited [2017] KECA 591 (KLR)** guided as follows about the power to strike out pleadings: *‘‘Striking out a pleading, though draconian, the court will, in its discretion resort to it, where, for instance, the court is satisfied that the pleading has been brought in abuse of its process or where it is found to be scandalous, frivolous or vexatious.’’* 1. The Appellant did not file an appealable decision therefore, the Tribunal does not know if the decision was issued in the first place. In the absence of an appealable decision, the Tribunal has nothing over which to exercise its jurisdiction. Further, the Appellant did not file its Statement of facts and as such, it could not prove its case. 2. It is the Tribunal’s considered view that this is one of those clear cases that must be struck out to return the Appellant to the drawing board to put its house in order. Under the circumstances, determination of the remaining issue is rendered moot. # FINAL DECISION 1. The upshot to the foregoing is that the Tribunal finds and holds that the Appeal is incompetent and makes the following orders:- a. The Appeal be and is hereby struck out; a. Each party to bear its own cost. 1. It is so ordered. **DATED** and **DELIVERED** at **NAIROBI** this 19TH DAY OF MAY **2026** SIGNED BY/FOR: HON. ROBERT MUGAMBI MUTUMA (CHAIRPERSON) HON. EUNICE NJERI NGANGA HON. BONIFACE KIBIY TERER HON. BILLY GRAHAM OKUMU MIJUNGU **★ TH E JUDICIAR Y O F KENY A ★** **HON. ROBERT MUGAMBI MUTUMA (CHAIRPERSON) HON. EUNICE NJERI NGANGA HON. BONIFACE KIBIY TERER HON. BILLY GRAHAM OKUMU MIJUNGU** Tax Appeals Tribunal Tribunal Date: 2026-05-19 17:08:09